You don't have any idea how it got turned on, is your computer part of any network or anything that requires use of a smart card?
You may still have to do the factory to reset everything back to normal, since everything seems to be set to operate only if accessed via a smart card.
It may be possible to change the setting in the registry but I don't know how, or where you would look for it.
Maybe someone else here does.
OK, I found this...
Boot into Safe Mode and logon as "administrator"
Run; Regedit.exe
Find...
HKLM\Software\Microsoft\Windows\CurrentVersion\Policies\system
Delete the key... SCForceOption
I
would back up anything important before I did this just to be safe, it should be safe to do this.
But better safe then sorry.
If it won't let you do this either then I think you'll have to reset the computer to factory specs to fix this.
Is there a problem with reinstalling your software after you get it back to factory specs?
With the factory reset you could be back up and running in an hour, but you will lose everything on your computer!
The only other option would be logging in with some kind of Windows system disk that will boot into the Windows environment independent of the installed OS and creating a disk like that requires a Windows installation disk and some work.
http://windows.microsoft.com/en-us/windows7/create-a-system-repair-disc I think it would be easier just to start over.
Mike